Irish officials raise queries with EU over disruptive post-Brexit 'rules of origin'

Carol Lynch, Partner, BDO Customs and International Trade featured in The Irish Times, discussing the 'rules of origin' restrictions that are disrupting supply chains from mainland Europe to Ireland.

Rules of origin are designed to prevent a UK company buying cheap products from a non-EU country and repackaging and rebranding them and then selling them into the EU tariff-free. The restriction is, however, preventing some products moving between two EU countries where the products are repackaged in UK distribution centres before being supplied into the Irish market.

Under the EU-UK trade deal, signed before Christmas, goods that are unpacked and repacked in the UK - and not subject to further manufacturing - face customs taxes, or tariffs, when reimported back into the EU.

The rules have led to severe disruption in supply chains and food shortages and empty shelves in Irish retail outlets of UK supermarket chains, in the Republic and Northern Ireland, and delayed the shipment of other goods.

Government officials have made “technical inquiries” with officials within the commission “to see what the possibilities are”, said one Government source, though they warned that finding a fix for the issue was unlikely.

“This is Brexit. The UK has left the single market and the customs union. They are a third country. That is the problem,” said the source. “If a good comes through England, that doesn’t mean that it should come under these rules, but if they are repackaged, there is a problem. That is not transit. “This is an issue which was unforeseen or not foreseen to the extent to which it should have been.”

Commenting on the issue, Carol said that a good moving from one EU country to another via UK distribution centres should not be subjected to tariffs if it has not undergone any operation “other than what was necessary to preserve it in good condition while in that third country or while being exported”.

“As long as the goods themselves are originally exported from the EU and are subsequently returned to the EU, then they can be returned to any country or entity who can provide proof of export and who can show the goods have not been changed while abroad,” said Carol.

Industry sources have warned that supermarkets which rely on supplies from Britain could find it difficult to keep their shelves fully stocked in the weeks ahead in spite of assurances from retailers and the Revenue Commissioners that there are few if any import issues.

Even large operations with a significant footprint in the Republic have been caught out by the level of paperwork required when importing food and log jams in the supply chain has seen Revenue introduce an emergency code to allow importers temporarily bypass some of the documentation rules on border controls.

---

Content adapted from The Irish Times.